Tech giants feel pinch of Standard closure

Technology giants Corio and Siebel Systems, as well as a host of real-estate companies, top the list of those holding IOUs from the parent company of The Industry Standard.

3 January 200211:43 am AEDT

Technology giants Corio and Siebel Systems, as well as a host of real-estate companies, top the list of those holding IOUs from the parent company of The Industry Standard.

When it filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California on Monday, Standard Media International owed $10.5 million to its top 20 unsecured creditors. Overall the company said it owed between $10 million to $50 million and had assets in the same range.

Among Standard Media's creditors was The Four Seasons Resort in Carlsbad,
Calif., to whom the company owed $241,879.99 for its annual Internet
Summit, Ann-Marie McGowan, the company's chief operating officer, said
Tuesday. The conference, which The Industry Standard hosted at the
Four Seasons last month, attracted such Net and technology
luminaries as Microsoft Chief Executive Steve Ballmer, Kleiner Perkins Caufield & Byers partner John Doerr and eBay Chief Executive Meg Whitman.

Standard Media's landlords comprised nine of its top 20 unsecured creditors. The company owed about $4.3 million in leases to companies such
as Pyramid Investment and CarrAmerica Realty for offices in San Francisco,
New York, Boston and Chicago. Standard Media owed Pyramid Investment $1.8 million alone for one of its buildings in San Francisco.

Standard Media ceased
publishing the weekly The Industry Standard two weeks ago, blaming
financial difficulties. The company expected to get a bridge loan to sell
the magazine, but negotiations fell through with several parties, company executives said.

The company decided to file for bankruptcy protection within the last two weeks but delayed filing to put its paperwork together, McGowan said. It
could have suspended the filing if a buyer or investor had stepped forward
to help the company satisfy its creditors, she said.

"But that didn't happen, and we didn't expect it to happen," McGowan said.

As part of the decision to cease publication, The Industry Standard
laid off 160
of its 180 workers. The company laid off dozens of workers in two
rounds of job cuts earlier this year.

Although the company paid severance in earlier rounds, employees laid off
after it ceased publishing did not receive severance checks.

McGowan said the company is in discussions with several parties
interested in everything from buying the company's customer list to
restarting the publication. She declined to say which companies Standard
Media is talking to but said they range from "the usual suspects"
to international concerns.

"It's a question of who bids the most in bankruptcy court at this point,"
McGowan said. "I think the interest is fairly serious."